malmo wrote:
Sure he can. The only requirement (Federal taxes, I believe most, if not all, States mirror the Federal rule) is that he pays on a quarterly basis, and have paid 90% of the current year taxes owed or 100% of the previous years taxes, whichever is smaller. This is an important distinction, because a person who has a dramatic increase in current year salary is only required to make quarterly payments that that are proportional to 100% of the previous liability.
https://www.eftps.com/eftps/
i'm familiar with how this works for business owners, including partners at professional services firms (and for other non-wage income such as capital gains), but i've never seen it used as the exclusive withholding mechanism for a wage earning employee. i assume you can't opt out of FICA at the federal level either (again, something i've never looked into).
i also don't know how you fill out your W-4 (or state equivalent) without lying, and you have to sign such forms (under penalties of perjury). the federal W-4 says, for example, "Note. You cannot claim exemption from withholding if (a) your income exceeds $950 and includes more than $300 of unearned income (for example, interest and dividends)and (b) another person can claim you as a dependent on his or her tax return." so you'd have to do it by claiming a high number of allowances, presumably falsely if you're trying to completely eliminate withholding.
here is the indiana form (i think):
http://www.in.gov/spd/files/wh4.pdfit says at the end "Penalties are imposed for willingly supplying false information".
as i said before, i personally don't see this as being "cause" for termination, and i'm not sure if his indiana source income was high enough for the indiana dept of revenue to care about him, so this is likely mostly an academic discussion.